1. ADB sees India grow by 11%, adds caveat
Lender sees ‘considerable downside risk’ from latest COVID wave, says may revise forecast in July
The Asian Development Bank has raised its forecast for India’s growth in 2021-22 to 11%, from 8% earlier, even as it warned that failure to control the resurgence of COVID-19 cases including April’s exponential jump poses a “considerable downside risk to the recovery”.
In its assessment based on end-March data, the ADB cited this year’s ‘more targeted’ containment measures compared with last year’s ‘large-scale’ national lockdown and said these would prove ‘less costly’ to the economy, which had seen a strong rebound in recent months’ economic indicators after last year’s ‘big recession’.
“A stimulus-fuelled surge in the U.S., India’s largest export market, will support the revival, but a severe second COVID-19 wave is threatening the recovery,” the lender said in its Asian Development Outlook report, projecting growth to moderate to 7% in 2022-23, after a 11% expansion this year. Government capex and accommodative financial policies, along with the vaccine roll-out programme this year, would also help, it added.
“Risks to the outlook tilt to the downside. The second wave of COVID-19 cases is worrying, especially if vaccine roll-out falters or fails to contain it. Another risk is a further tightening of global financial conditions, which would apply pressure on India’s market interest rates and therefore affect economic normalisation,” the ADB warned, adding that a likely pick-up in private investment could be dented as rising bad loans could discourage India’s banks from undertaking fresh lending.
The lender sees India’s average inflation rate slowing to 5.2% this year from 6.2% last fiscal, and reverting to 4.8% (recorded in 2019-20), over the succeeding 12 months. “Inflation is projected to moderate as good harvests and supply chain recovery contain domestic food inflation even as global food prices rise, though oil prices… may exert some inflationary pressure,” the ADB noted, adding that gasoline taxes had spurred fuel inflation last year even though oil prices had been low.
“The projections are based on data and information up to March 31, so we were already aware… of the rise in cases,” said Abdul Abiad, ADB’s director for macroeconomic research. “Obviously, throughout the month of April, cases have risen exponentially and that really poses a downside risk. We need to monitor the situation closely; depending on how that evolves and the policies implemented to respond to that, we may have to revise our forecast in July.”
Asian Development Bank
- Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in Manila, Philippines.
- ADB aims to promote social and economic development in Asia.
- The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and non-regional developed countries.
- The ADB was modeled closely on the World Bank, and has a similar weighted voting system.
- From 31 members at its establishment, ADB now has 68 members.
- ADB is an official United Nations Observer.
- India was a founding member of the Asian Development Bank (ADB) in 1966 and is now the bank’s fourth largest shareholder and top borrower.
- ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
- The aim of the ADB is social development by reducing poverty in the Asia Pacific with inclusive growth, sustainable growth, and regional integration. This is carried out through an 80% investment in the public sector.
- ADB invests in infrastructure, health, public administration system, helping nations to reduce the impact of climate change and to manage natural resources.
Asian Development Bank (ADB) & India
India started availing of ADB’s assistance in 1986. The aim is of Asian Development Bank is to support India in the following fields:
- Industrial competitiveness
- Jobs creation
- Growth acceleration of low-income states
- Environmental and climate change challenges
There are six sectors in India where we can see ADB’s presence:
- Water and urban services
- Finance and public sector management
- Agriculture and natural resources, and
- Human development
The projects in India spanning 25 states where ADB has assisted/is assisting are:
- Railways and mass rapid transit system
- Renewable energy and energy efficiency
- Coastal protection
- Riverbank strengthening & river basin management
- Urban environmental management, including water management, sanitation, and sewerage and solid waste management.
Recent development between ADB & India:
- ADB and India have signed a loan of $206 million to strengthen urban services in 5 Tamil Nadu cities
- Asian Development Bank (ADB) has listed its 10-year masala bonds worth Rs 850 crore on the global debt listing platform of India INX
- Asian Development Bank (ADB) had prepared a Conceptual Development Plan (CDP) for Vizag-Chennai Industrial Corridor (VCIC)
- ADB has offered to provide USD 4 million to member countries to contain coronavirus outbreaks.
- The Asian Development Bank (ADB) will provide Rs 100 crore loan to hospital chain Medanta for healthcare services and medical equipment to fight the COVID-19 pandemic. The project will support the purchase of personal protective equipment, basic hygiene products, and patient care equipment such as ventilators and beds.
Asian Development Bank & Covid-19
- As a response to COVID-19, the World Bank Group and the Asian Development Bank is coordinating more than $15.4 billion in wide-ranging lending programs in South Asia.
2. Editorial-1: A patently wrong regime
Over the last few decades, intellectual property rules have served as a lethal barrier to the right to access healthcare
Even an unprecedented pandemic can do little, it appears, to upset the existing global regime governing monopoly rights over the production and distribution of life-saving drugs. If anything, since the onset of COVID-19, we’ve only seen a reaffirmation of intellectual property rules that have served as a lethal barrier to the right to access healthcare over the last few decades. The neo-liberal order, under which these laws exist, is so intractable today that a matter as seemingly simple as a request for a waiver on patent protections is seen as a claim unworthy of exception.
Request for waiver
On October 2 last year, India and South Africa submitted a joint petition to the World Trade Organization (WTO), requesting a temporary suspension of rules under the 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). A waiver was sought to the extent that the protections offered by TRIPS impinged on the containment and treatment of COVID-19. As we now know, quick and efficient vaccination is the surest route to achieving global herd immunity against the virus. Should the appeal for waiver be allowed, countries will be in a position, among other things, to facilitate a free exchange of know-how and technology surrounding the production of vaccines.
The request for waiver has, since, found support from more than 100 nations. But a small group of states — the U.S., the European Union, the U.K. and Canada among them — continues to block the move. Their reluctance comes despite these countries having already secured the majority of available vaccines, with the stocks that they hold far exceeding the amounts necessary to inoculate the whole of their populations. Their decision is all the more galling when one considers the fact that for the rest of the world mass immunisation is a distant dream. Reports suggest that for most poor countries it would take until at least 2024 before widespread vaccination is achieved.
A patent is a conferral by the state of an exclusive right to make, use and sell an inventive product or process. Patent laws are usually justified on three distinct grounds: on the idea that people have something of a natural and moral right to claim control over their inventions; on the utilitarian premise that exclusive licenses promote invention and therefore benefit society as a whole; and on the belief that individuals must be allowed to benefit from the fruits of their labour and merit, that when a person toils to produce an object, the toil and the object become inseparable. Each of these justifications has long been a matter of contest, especially in the application of claims of monopoly over pharmaceutical drugs and technologies.
A new world order
In India, the question of marrying the idea of promoting invention and offering exclusive rights over medicines on the one hand with the state’s obligation of ensuring that every person has equal access to basic healthcare on the other has been a source of constant tension. The colonial-era laws that the country inherited expressly allowed for pharmaceutical patents. But in 1959, a committee chaired by Justice N. Rajagopala Ayyangar objected to this on ethical grounds. It noted that access to drugs at affordable prices suffered severely on account of the existing regime. The committee found that foreign corporations used patents, and injunctions secured from courts, to suppress competition from Indian entities, and thus, medicines were priced at exorbitant rates. To counter this trend, the committee suggested, and Parliament put this into law through the Patents Act, 1970, that monopolies over pharmaceutical drugs be altogether removed, with protections offered only over claims to processes.
This change in rule allowed generic manufacturers in India to grow. As a result, life-saving drugs were made available to people at more affordable prices. The ink had barely dried on the new law, though, when negotiations had begun to create a WTO that would write into its constitution a binding set of rules governing intellectual property. In the proposal’s vision, countries which fail to subscribe to the common laws prescribed by the WTO would be barred from entry into the global trading circuit. It was believed that a threat of sanctions, to be enforced through a dispute resolution mechanism, would dissuade states from reneging on their promises. With the advent in 1995 of the TRIPS agreement this belief proved true.
As the Yale Law School professor Amy Kapczynski has written, compelling signatories to introduce intellectual property laws like those in the global north was nothing short of a scandal. The follies in this new world order became quickly apparent when drugs that reduced AIDS deaths in developed nations were placed out of reach for the rest of the world. It was only when Indian companies began to manufacture generic versions of these medicines, which was made possible because obligations under TRIPS hadn’t yet kicked in against India, that the prices came down. But lessons from that debacle remain unlearned.
Instead, two common arguments are made in response to objections against the prevailing patent regime. One, that unless corporations are rewarded for their inventions, they would be unable to recoup amounts invested by them in research and development. Two, that without the right to monopolise production there will be no incentive to innovate. Both of these claims have been refuted time and again.
Most recently, it has been reported that the technology involved in producing the Moderna vaccine in the U.S. emanated out of basic research conducted by the National Institutes of Health, a federal government agency, and other publicly funded universities and organisations. Similarly, public money accounted for more than 97% of the funding towards the development of the Oxford/AstraZeneca vaccine. Big pharma has never been forthright about the quantum of monies funnelled by it into research and development. It’s also been clear for some time now that its research is usually driven towards diseases that afflict people in the developed world. Therefore, the claim that a removal of patents would somehow invade on a company’s ability to recoup costs is simply untrue.
The second objection — the idea that patents are the only means available to promote innovation — has become something of a dogma. But other appealing alternatives have been mooted. The economist Joseph Stiglitz is one of many who has proposed a prize fund for medical research in place of patents. Under the current system, “those unfortunate enough to have the disease are forced to pay the price… and that means the very poor in the developing world are condemned to death,” he wrote. A system that replaces patents with prizes will be “more efficient and more equitable”, in that incentives for research will flow from public funds while ensuring that the biases associated with monopolies are removed.
The unequal vaccine policy put in place by the Indian state is indefensible. But at the same time, we cannot overlook the need for global collective action. If nation states are to act as a force of good, they must each attend to the demands of global justice. The pandemic has demonstrated to us just how iniquitous the existing world order is. We cannot continue to persist with rules granting monopolies which place the right to access basic healthcare in a position of constant peril. In its present form, the TRIPS regime, to borrow the law professor Katharina Pistor’s words, represents nothing but a new form of “feudal calculus”.
3. Editorial-2: Marking the beginning of a green era
To combat climate change, Saudi Arabia has launched the Saudi Green Initiative and Middle East Green Initiative
One of the lessons learned from the ongoing COVID-19 pandemic is the need for collective action among members of the international community to effectively address global challenges such as pandemics and climate change. The pandemic has created an unprecedented crisis that demands an exceptional global response. Even as countries rightly continue to focus on tackling the immediate health emergency, the need is to have a long-term vision to build a climate-resilient global economy for the future.
Progress towards goals
Ambition alone cannot attain goals. Good results depend on our ability to act. That is precisely what defines the two recent initiatives launched by Crown Prince Mohammed bin Salman bin Abdulaziz, Deputy Prime Minister of the Kingdom of Saudi Arabia, to combat the threat of climate change — the ‘Saudi Green Initiative’ and the ‘Middle East Green Initiative’.
In fact, one of the main pillars of the Saudi G20 presidency was to “safeguard the planet”. The Saudi leadership of the summit highlighted how climate change had negatively impacted the planet, people’s lives and their well-being. The G20 introduced initiatives like establishing a Global Coral Reef Research and Development Accelerator Platform to accelerate scientific knowledge and technology development in support of coral reef survival, conservation, resilience, adaptation and restoration. G20 leaders also acknowledged the Circular Carbon Economy (CCE) Platform as a tool towards affordable, reliable, and secure energy and economic growth.
Saudi Arabia is committed to lead regional efforts to address climate change and has been making steady progress in this direction.
The Saudi Green Initiative aims to raise the vegetation cover, reduce carbon emissions, combat pollution and land degradation, and preserve marine life. As part of the initiative, 10 billion trees will be planted in the Kingdom. It aims to reduce carbon emissions by more than 4% of global contributions, through a renewable energy programme that will generate 50% of Saudi’s energy from renewables by 2030. With the understanding that the need of the hour is to do more than enough, Saudi Arabia is working towards raising the percentage of its protected areas to more than 30% of its total land area, representing roughly 6,00,000 sq km, exceeding the global target of 17%.
As part of the Middle East Green initiative, Saudi Arabia will work with the Gulf Cooperation Council countries and regional partners to plant an additional 40 billion trees in the West Asian region. It represents 5% of the global target of planting one trillion trees and reducing 2.5% of global carbon levels. Saudi Arabia has been sharing its expertise and know-how with its neighbouring countries to reduce carbon emissions resulting from hydrocarbon production in the region by 60% and globally by 10%.
Saudi Arabia currently operates the largest carbon capture and utilisation plant in the world, turning half a million tonnes of CO2 annually into products such as fertilizers and methanol. It also operates one of the region’s most advanced CO2-enhanced oil recovery plants that captures and stores 8,00,000 tonnes of CO2 annually. Plans are afoot to deploy additional carbon capture, utilisation and storage infrastructure. Saudia Arabia believes that nature-based solutions will play an important role in removing carbon as part of the CCE. We have already joined hands in February 2019 with India when Saudi Arabia joined the International Solar Alliance during the Crown Prince’s state visit to the country, hence promoting cooperation in the renewable energy sector. Later that year, when the Indian Prime Minister visited Saudi Arabia, several MoUs and agreements in key sectors including renewable energy were signed.
To ensure momentum and continuity, Saudi Arabia will convene an annual summit called the Middle East Green Initiative which will host leaders from the government, scientists and environmentalists to discuss the details of implementation. The aim is start implementing the plan in the fourth quarter of this year and continue for the next two decades. Saudi Arabia also recognises the scarcity of financial resources to irrigate the terrain. Therefore, in partnership with participating countries, innovative methods will be researched to irrigate from treated water, cloud seeding and other purpose-driven solutions such as planting native trees which requires support for three years to grow and will then be able to survive on their own with natural irrigation.
Working towards Vision 2030
In 2016, the Crown Prince unveiled Vision 2030, a comprehensive road map to improve the quality of life of the citizens of the country. As part of this, Saudi Arabia carried out a comprehensive restructuring of the environmental sector and established the Environmental Special Forces in 2019. With NEOM and The Line, Saudi Arabia has already redefined the idea of sustainable habitats. NEOM’s location also gives Saudi Arabia many advantages in the field of hydrogen production. According to the World Bank, for every dollar invested in resilient infrastructure, $4 in benefits are generated. With the Public Investment Fund recently pumping in $15 billion in the NEOM project and another $10 billion in renewable and solar energy projects, it is clear that the pandemic has only strengthened Saudi Arabia’s resolve to realise the goals of Vision 2030 and become one of the major producers of renewable energy with a capacity to generate 9.5 GW by 2023.
Our close friend and strategic partner India has also made remarkable commitments to tackle climate change and is on track to achieve its Paris Agreement targets. India’s renewable energy capacity is the fourth largest in the world. India has an ambitious target of achieving 450 gigawatts of renewable energy capacity by 2030. We admire India’s endeavour to build a safe and clean environment for future generations.
Saudi Arabia hopes that the launch of the Saudi Green Initiative and the Middle East Green Initiative marks the beginning of a green era and that these initiatives provide momentum to other countries to unify their efforts to save our planet.